The lettings industry and the Labour party remain on a collision course ahead of next year’s general election.
Labour has repeated its vow to make letting agent fees illegal, while agents are stepping up calls for wholesale regulation of the industry.
Speaking after Tuesday evening’s failed bid by Labour to have fees banned, Paul Weller, managing director of lettings chain Leaders, said: “Fortunately common sense has prevailed, but the vote was a wasted opportunity.
“The vote should have been on banning all unregulated agents from practising.
“This would have enabled Parliament to tackle all the problems at the heart of our industry in one motion: 40% of letting agents are not members of a professional body so it is clear that self-regulation is not enough.
“What is needed is legislation that ensures that – as a minimum requirement – all letting agents are qualified, have client money protection and operate to an agreed code of conduct for the whole industry.
“The issues go much further than agents charging fees to tenants. We need to rid the industry of rogue agents who charge extortionate fees, who do not protect their clients’ money and in some cases abuse it, who put their tenants’ lives at risk in unsafe properties and who provide a sub-standard service with little regard for the law.
“The best action politicians can take to protect tenants is to properly regulate letting agents. We have been calling for this for decades.”
Ian Potter, outgoing managing director of ARLA, said: “Fees are not arbitrary or unnecessary – they represent a business cost that those tabling the amendment failed to recognise.
“ARLA’s call, as ever, is for wholesale regulation of the market to ensure fair and transparent practices for all consumers, landlords and agents alike.”
Darren Harley, of EweMove, said: “Whilst we agree that there are far too many lettings agents across the country who don’t disclose their application fees too readily, banning all fees to tenants isn’t the way to promote fairness. It will simply drive up fees to the landlords which, in turn, will drive rents up.
“Ewemove charges no application fees, and only ever charges tenants once a property has been offered to them. We believe this is a much better system because it ensures more applications per property, and we can find the very best tenant for the landlord every time.
“Yes, the agent earns slightly less under this model, but it’s not all about the agent.
“Regulation of the industry is clearly required.
“We’ve all seen the reports from Shelter and other organisations, declaring the unscrupulous practices of a few rogue agents. I really don’t believe that those horror stories are the norm in the UK, but I do think that things can be improved, and a professional standard would be the way forward.
“The most obvious route would be compulsory membership of ARLA, and ARLA’s standards being strengthened.”
However, one person who took to Twitter to complain about the way the vote went was London Evening Standard columnist and landlord Victoria Whitlock.
She said: “Am disappointed MPs bought that bunkum that tenants would have paid more if letting agent fees were banned.”
The tireless Stella Creasy, Labour shadow consumers minister, was back on Twitter yesterday claiming: “An agency has contacted me to argue fees to tenants justified because they ‘give them a bag for life & mug’ upon arrival. Yes really.”
Meanwhile, shadow housing minister Emma Reynolds put the industry on warning by making it clear that the whole issue has not gone away.
She said: “Generation Rent needs proper protection against being ripped off.
“A Labour government will ban letting agent fees on tenants.”
* There were just three rebels when it came to Tuesday evening’s vote on letting agent fees – one Tory and two Lib Dems who refused to toe their party line.
Phillip Hollobone, the Tory MP for Kettering, and Lib Dem MPs Julian Huppert (Cambridge) and Ian Swales (Redcar) all voted to ban letting agent fees.
Of the Lib Dems, 38 voted against a ban, and 16 were missing. Among the absentees were Nick Clegg, Vince Cable, Danny Alexander, Andrew Stunell, Sarah Teather and Jo Swinson.
There were 242 Tory MPs who voted against the ban, with 58 absent from the vote. Absentees included David Cameron and George Osborne.
Labour’s attempt to ban letting agent fees was defeated by a majority of 53 (281 to 228).
Comments (9)
Amazing how unprofessionally the Labour party can go about their business. If I carried on like that I wouldn't have a business.
Interesting article. Who would have thought Ed Miliband and Cameron Robb were already acquainted?! What a lovely co-incidence.
http://www.theinformationdaily.com/2006/10/17/campbell-robb-appointed-new-director-of-the-office-of-the-third-sector
Or indeed Millibrain and Unite: http://www.dailymail.co.uk/news/article-2629889/Unite-handed-Red-Ed-2million-backed-rent-control-plan-Tories-say-donation-makes-mockery-Milibands-claims-reducing-influence-unions-party.html
They do say ignorance is bliss, they must all live a blissfully ignorant existence. They take a sledgehammer to crack a nut when they have not got a clue what they are talking about. Typical
Let's hope that Emma Reynolds has a healthy stock of property for the less than blue chip tenants that are likely to end up Section 8'd if she tries.
Sorry to sound rude Emma but you ought to be embarrassed by your rhetoric. Forget that it is the coalition that are currently front of house staff for CLG and DWP have a little look at the achievements and advice coming out of both departments over the past 10 years. It is not the various ministers and shadow ministers that are at fault it is the woeful lack of understanding that is providing the briefing that is flawed.
The private rented sector can afford to set is sights a bit higher than the mean on the standard deviation curve, that means that Government lands itself with the obligation of homing far far more tenants that it does at present. Irrespective of the colour of the government it can not afford to fund financially or socially the disturbance of encouraging Landlords and Agents out of the PRS.
P.S -Brilliant capitalisation Ros, that really conveyed the venom of a petulant hissy fit.
And for what it's worth, I don't knowingly loose instructions due to not being an ARLA member. I show my qualifications, explain why I am not and that I belong to the TPOS scheme, we market.
I am not surprised by Paul Weller's remarks, heading such a large network of offices that doubtless charges tenants for everything it possibly can. But we are agreed that it was a wasted opportunity to deal with rogue agents.
Having qualified to ARLA standard myself, and having been a member of ARLA for a good number of years, I am no longer a member. The organisation lacks guts, and cannot possibly police its members. There was, and I assume still is the case, no random auditing of agents. Makes it far to easy for an agent to say "come to us, we're ARLA members, you'll be safe" then skillfully fleece. I've seen it with agents around me.
ARLA members go bad just as much as rogues. What we need in this country is proper regulated licencing – managed by one advisory and redress scheme – not three (!!) – where no branch manager or business owner can practice without having attained suitable qualification and experience (min 5 years for business owner), with mandatory annual refreshment exams.
MPs who have fundamental misunderstanding of how the market works. Hardly a new phenomenon. Lets face it is there any industry that they do understand? Why should ours be any different. What is insulting is the obvious arrogance in believing that they know better than the people who work in said industries.
We will ban MP's expenses